Wonks Creation of Potato Chip Monopoly


Two lawyers quietly bought up all the potato chip signs in the Northwest in 2007 and began operations as a monopoly called Wonks. Operating under the boldness that the potato chip industriousness in the Northwest in 2007 was competitively coordinated and in long-run competitive rest; and firms were earning a normal rate of return and were competing in a monopolistically competitive market place, it was a wise choice to make this move. self-aggrandising look atation to the stakeholders, government, businesses and consumers, although they will not all benefit from this situation, all in all it is not a bad choice. Prices and output signal will indeed change as the market requires a different approach now that there are no competitive firms. With these changes considered, Wonks made the best choice, but it must consider which market they would have better benefited from, and consider which market twist benefits the consumers in this situation to make the final consideration.

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Since a monopoly is delineate as an industry composed of only one firm that produces a product for which there are no nigh substitutes and in which significant barriers exist to prevent new firms from debut the industry, it is clear that Wonks is now a true monopoly as it has purchased all its competitors. By doing so they have complete mince over the entire industry, including price and output, which obliges their place on the market demand curve. When this happens, the firm is now controlling the entire industry which could lead to price discrimination that will affect suppliers and consumers. The firms could hinge upon different prices to different suppliers, leading to higher prices for the consumer just ground on who their supplier is. These higher prices could be based on market size, location and or just the size of the supplier. This control on pricing ultimately hurts the consumer (Salvatore, 2003).
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